WASHINGTON – Environmentalists see some of their worst fears playing out as President Bush moves to cement a second-term agenda that includes getting more timber, oil and gas from public lands and relying on the market rather than regulation to curb pollution.

Bush’s top energy priority – opening an Alaska wildlife refuge to oil drilling – is shaping up as an early test of GOP gains in Congress.

“This is going to be a definitional battle, and we’re ready,” said Deb Callahan, president of the League of Conservation Voters.

Though the election didn’t emphasize such issues, administration officials believe the results validated their belief that many environmental decisions are better made by the marketplace, landowners and state and local governments.

James Connaughton, chairman of the White House Council on Environmental Quality, said the administration will continue a “partnership with the oil and gas sector” but also will work with conservation organizations – as long as they are “willing to engage constructively on defining priorities and practices in domestic production.”

Bush’s environmental priority is to rewrite the Clean Air Act to set annual nationwide limits on three major air pollutants from power plants and to allow marketplace trading of pollution rights rather than regulation to meet those goals.

He does not plan to change his mind on his rejection of the Kyoto international climate treaty that would impose mandatory caps on carbon dioxide emissions. “Kyoto’s unworkable,” Connaughton said.

Because of an environmental group’s lawsuit, the EPA is preparing to issue its first regulations to cut mercury pollution from coal-burning power plants and new standards for cutting soot in the air and reducing power plant pollution that drifts between states.

Mike Leavitt, administrator of the Environmental Protection Agency, foresees more EPA water monitoring and preparations against chemical and biological attacks.

Republicans in Congress plan to re-examine other landmark 1970s laws: the Endangered Species Act protecting rare plant and animal species and their habitats, and the National Environmental Policy Act that requires the government to judge beforehand if actions might damage natural resources.

One area where environmentalists and the White House could find agreement is ocean issues. The administration is looking at setting catch quotas for individual fish species, new protections for fragile coral reefs and ecosystem-based management of rivers and streams, Connaughton said.

The administration put off until after the election a final decision on a plan to allow road building and logging on 58 million acres of remote forests where both are now banned.

Interior Secretary Gale Norton’s agency is rewriting 162 plans for managing about one of every 10 acres in the United States. The decisions will affect whether wildlife protections or new oil and gas drilling projects are favored. Norton wants to give local governments more say.

Environmentalists still view the courts as their last resort.

The day after the election, the staff of the law law firm Earthjustice “gathered to face the news that the most anti-environmental administration will be back for four more years,” Buck Parker, the firm’s executive director wrote supporters. But, he added, “We’re more determined than ever to carry on.